Norwegian Cruise Line (NCLH) may face a longer path to operational improvement following its recent CEO change, UBS Securities said in a Tuesday note.

The brokerage said the announcement of John Chidsey's appointment as chief executive prompted questions about the durability of 2025 EBITDA guidance of $2.72 billion. The company reiterated that "core results" would be in line with prior expectations.

UBS said Norwegian Cruise Line underperformed peers over the past year, pointing out that Carnival (CCL) raised guidance four times while NCLH lowered its outlook three to four times.

Channel checks indicate demand remains solid for Royal Caribbean Cruises (RCL) and Carnival. The investment firm said this suggests Norwegian's challenges are company-specific rather than reflective of broader cruise industry trends. The company's weaker brand positioning and balance sheet constraints have limited its ability to invest in revenue management technology.

While its analysis suggests the company's luxury brands, Regent Seven Seas and Oceania, could warrant higher valuation multiples than the core Norwegian brand, UBS cautioned that realizing that value depends on a sustained turnaround and the timing remains uncertain.

The firm has a neutral rating and a $27 price target on Norwegian Cruise Line.

Shares of Norwegian Cruise Line were up more than 7% in recent trading.

Price: 23.07, Change: +1.58, Percent Change: +7.33